931 Romford Road Manor Park E12 5JT LON/00BB/LDC/2024/0082

FIRST-TIER TRIBUNAL

PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case No LON/00BB/LDC/2024/0082

Between

V&J Investments LtdApplicant

The leaseholders named in the annex to the applicationRespondent

Before

Mr A Harris LLM FRICS FCIArb

Rahul Khimasia for the Applicant

Not represented Application for dispensation from the consultation requirements of s20 under for the Respondent

Venue 10 Alfred Place, London WC1E 7LR

Date 29 May 2024

Type of application: section 20ZA of the Landlord and Tenant Act 1985

DECISION

[1]The tribunal refuses the application to grant dispensation from the consultation requirements of s20ZA in respect of the works required to replace and upgrade the connections from the building to the water mains. The application

[2]The Applicant seeks dispensation from the consultation requirements under section 20ZA of the Landlord and Tenant Act 1985 (“the 1985 Act”) in respect of works required alleviate a problem of low water pressure affecting 2 flats in the building comprising for flats and one commercial unit. An initial notice under section 20 was served on 15 February 2024. The tribunal has no jurisdiction over the service charge for the commercial unit.

[3]Directions were made on 15 April 2024 for a paper determination in the week commencing 27 May 2024. The only issue for the tribunal is whether it is reasonable to dispense with the statutory consultation requirements.

[4]This decision does not concern the issue of whether any service charge costs will be reasonable or payable. The hearing

[5]A written application was made by the managing agents of the property on behalf of the landlord under the leases of the flats in the block on 7 March 2024.

[6]Copy leases of each flat have been provided. The case was decided on paper and no appearances were made. A written representation was received from the leaseholder of flat B. The tribunal considered the written application form, copy letters to the leaseholders, the estimate and the leases included in the bundle. The background

[7]The property is a building consisting of a ground floor shop and for flats above. Each lease requires the landlord to provide services and the tenant to contribute towards their costs by way of a variable service charge.

[8]An inspection was not requested and the tribunal did not consider that one was necessary, nor would it have been proportionate to the issues.

[9]Copy leases have been provided from which it is not clear that the scope of the works is within the service charge provisions of the lease. Additionally one leaseholder has objected to the granting of dispensation on the grounds that the work only affects 2 flats out of 4 and it is not clear what work is required and whether there are alternative methods of alleviating the low water pressure. The hearing bundle includes a contractor’s estimate dated 7 May 2024 in the sum of £2736 and a Thames water estimate dated 28 March 2024 totalling £13,440, both of which are dated after the initial notice under section 20. It is not clear whether this information has been shared with leaseholders or comment invited.

[10]A list of leaseholders has been provided. The tribunal directed the applicant to provide copies of the application and directions to each lessee and to display the directions in the common entrance. It is not clear this has been done. The Law s20ZA of the Landlord and Tenant Act 1985 Service charges 20ZA Consultation requirements: supplementary (1)Where an application is made to the appropriate tribunal for a determination to dispense with all or any of the consultation requirements in relation to any qualifying works or qualifying long term agreement, the tribunal may make the determination if satisfied that it is reasonable to dispense with the requirements. (2)In section 20 and this section— “qualifying works” means works on a building or any other premises, and “qualifying long term agreement” means (subject to subsection (3)) an agreement entered into, by or on behalf of the landlord or a superior landlord, for a term of more than twelve months. (3)The Secretary of State may by regulations provide that an agreement is not a qualifying long term agreement— (a)if it is an agreement of a description prescribed by the regulations, or (b)in any circumstances so prescribed. (4)In section 20 and this section “the consultation requirements” means requirements prescribed by regulations made by the Secretary of State. (5)Regulations under subsection (4) may in particular include provision requiring the landlord— (a)to provide details of proposed works or agreements to tenants or the recognised tenants’ association representing them, (b)to obtain estimates for proposed works or agreements, (c)to invite tenants or the recognised tenants’ association to propose the names of persons from whom the landlord should try to obtain other estimates, (d)to have regard to observations made by tenants or the recognised tenants’ association in relation to proposed works or agreements and estimates, and (e)to give reasons in prescribed circumstances for carrying out works or entering into agreements. (5A)And in the case of works to which section 20D applies, regulations under subsection (4) may also include provision requiring the landlord— (a)to give details of the steps taken or to be taken under section 20D(2), (b)to give reasons about prescribed matters, and any other prescribed information, relating to the taking of such steps, and (c)to have regard to observations made by tenants or the recognised tenants’ association in relation to the taking of such steps. (6)Regulations under section 20 or this section— (a)may make provision generally or only in relation to specific cases, and (b)may make different provision for different purposes. (7)Regulations under section 20 or this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

[11]The applicable case law is Daejan Investments Ltd v Benson

[2013] UKSC 14

, 1 WLR 854 where the Supreme Court held that the relevant test is whether the leaseholders have suffered prejudice by the failure to consult. Where the extent, quality and cost of the works were unaffected by the landlord’s failure to comply with the consultation requirements, an unconditional dispensation should normally be granted. The tribunal’s decision

[12]The tribunal refuses the application to grant dispensation from the consultation requirements of under s20 ZA of the Landlord and Tenant Act 1985 and the Service Charges (Consultation Requirements) (England) Regulations 2003 Reasons for the tribunal’s decision

[13]The works are to upgrade the water supply to the property from the mains by providing separate water supplies to each unit with consequential internal alterations to the plumbing layout.

[14]The tribunal is satisfied that the leaseholders were aware of the general nature of the works required and one leaseholder has objected.

[15]It is not clear from the leases that the works fall within the service charge provisions of the leases and the applicant will need to explain this in completing the consultation or in a section 27A application.

[16]The cost of the works is substantial and it is not clear from the application that alternative methods of alleviating the problem, which is said to affect 2 flats, have been considered. The application does not make clear that the leaseholders are aware of the likely cost.

[17]The Tribunal is being asked to exercise its discretion under s.20ZA of the Act. The wording of s.20ZA is significant. Subs. (1) provides: “Where an application is made to a [leasehold valuation] tribunal for a determination to dispense with all or any of the consultation requirements in relation to any qualifying works or qualifying long term agreement, the tribunal may make the determination if satisfied that it is reasonable to dispense with the requirements” (emphasis added).

[18]The Tribunal understands that the purposes of the consultation requirements is to ensure that leaseholders are given the fullest possible opportunity to make observations about expenditure of money for which they will in part be liable. The test laid down by the Supreme Court in Daejan v Benson is whether the leaseholders would suffer prejudice if the application were to be granted and a full consultation not carried out.

[19]The tribunal considers that there would be prejudice to the leaseholders in granting dispensation as alternative works do not appear to have been considered and the cost of the works is substantial. The consultation process should be completed. Name: A Harris Date: 29 May 2024 Rights of appeal By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the tribunal is required to notify the parties about any right of appeal they may have. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written application for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case. The application for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the person making the application. If the application is not made within the 28-day time limit, such application must include a request for an extension of time and the reason for not complying with the 28-day time limit; the tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed, despite not being within the time limit. The application for permission to appeal must identify the decision of the tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal and state the result the party making the application is seeking. If the tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).